The richest Scandinavians are having a budget dispute involving Norway’s worst terrorist and a capsized warship.
The row started after Norwegian Prime Minister Erna Solberg proposed an “under the line” budget item to cover the estimated 19 billion kroner ($2.2 billion) it will cost to replace a navy frigate that collided with a tanker and ran aground last year and to resurrect the government offices destroyed in Anders Behring Breivik’s 2011 terror attack.
Solberg, trying to create room for tax cuts and other budget priorities in the years ahead, argues that these unanticipated costs shouldn’t be counted in the regular budget. Re-elected in 2017, the 57-year-old has spent her time in office fending off an oil crash that began in 2014, spending record amounts and making the first-ever withdrawals from the nation’s $1 trillion wealth fund. Excluding its giant piggy bank, Norway’s budget deficits amount to more than 7 per cent of gross domestic product.
Her scolds, including economists, the opposition and current and former chiefs of the central bank, say that she’s heading down a slippery slope that risks the fiscal framework that has kept politicians in line over the past two decades and helped Norway build the world’s biggest wealth fund.
“This is a way to circumvent the fiscal spending rule,” said Svein Roald Hansen, a lawmaker from the Labor Party and member of the legislature’s Finance Committee.
The dispute has been characterized in the local press as a way for Solberg to sneak in the use of more oil money, beyond the roughly 230 billion kroner she now takes to pad deficits. The fiscal rule states that the government can use up to 3 per cent of the wealth fund’s value to fill budget needs, a limit she has stayed below so far. Her government even tightened it from 4 per cent in 2017.
Solberg hasn’t shied away from the debate. “We can refrain from building a new government quarter and give a win to Anders Behring Breivik,” she told news agency NTB. “The four buildings he destroyed will remain there — as a dead landscape and a monument to an act of terrorism.”